Governor locks O'Hare project into state law

After years of debate, wrangling and failed attempts, the push to expand O'Hare International Airport marked a historic milestone Wednesday when Gov. Rod Blagojevich signed a bill cementing the controversial $6.6 billion project into law.

The massive reconfiguration of the airfield, including the addition of an eighth runway, still must win Federal Aviation Administration approval. And a financing plan that relies heavily on revenue from a beleaguered airline industry must prove feasible.

But Chicago Mayor Richard Daley, the project's sponsor, expressed no doubts that it now will become a reality.

"We are pretty good hurdle-jumpers," he told reporters after Blagojevich put his signature on the bill during a lengthy ceremony at an O'Hare hangar.

"Thank God this day has arrived," an exuberant Daley said earlier as he addressed the audience. "This is a great day for Chicago, the state of Illinois and the nation."

Leaders of some of the suburbs surrounding O'Hare, including the mayor of Elk Grove Village, still oppose the expansion and have vowed to continue to fight it.

Also, Sen. Peter Fitzgerald (R-Ill.) is expected Thursday to release a study showing much higher costs for the O'Hare expansion than the official total, raising questions about how the airline industry would be able to finance the project while struggling to restructure.

Mayor Craig Johnson of Elk Grove Village called the signing ceremony "a PR stunt," but one that carried a frightening message for Illinois municipalities because a provision allows Chicago to acquire suburban land for the project.

"In the state's history, no town has ever had quick-take [condemnation] authority over any other town," he said. "What's to say that Chicago won't need 500 acres in Evanston for a stadium that's important regionally? Once they set this precedent, nothing's going to stop Chicago from taking other land later on."

The project would require the city to acquire 433 suburban acres bordering O'Hare and would result in the demolition of more than 600 residences and businesses.

The owner of one of those homes is Gloria Schroeder, 65, of Bensenville.

"We've lived here 40 years," she said. "I don't think it's fair at all. We are not part of Chicago, and we are not part of Cook County. But then again, you can't fight City Hall."

For years Chicago business leaders and airline executives lobbied for O'Hare's expansion, and Daley long harbored secret ambitions for added capacity and more efficient operations at the airport. But for those who supported the project, Wednesday's event was anything but assured before Blagojevich's election last fall.

Under previous Illinois law, airport expansion required gubernatorial approval. And though Blagojevich is a staunch supporter of the O'Hare project, a future governor could have stopped it after millions of dollars had been spent on planning and design as well as initial construction. Daley was reluctant to begin a project he had no guarantee would be finished.

But the measure signed Wednesday is designed to prevent that from happening.

Democratic control of the Senate after November's elections also was key to passage of the bill, though the measure enjoyed bipartisan support.

The Fitzgerald study shows the expansion would burden American Airlines and United Airlines with hundreds of millions of dollars in additional debt-financing costs each year, beyond the obligation on the airlines already indicated by Chicago in a recently reached partial financing agreement.

The study, a "quantity-and-unit-cost analysis," tries to break down the expense of building new runways and other facilities into estimated component costs, such as the number of yards of concrete, miles of electrical cable and labor.

Chicago officials have declined to release their unit-expense estimates on the project. They said they are confident the airfield improvements will be held to $6.6 billion.

The Fitzgerald study estimates the full expansion cost at $15.7 billion.

"We had the numbers worked up, and they put a very high financial burden in annual debt service on American and United that will run counter to their other obligations, including employee pensions," said a source familiar with the study. "We believe they won't be able to pay it."

The major airlines are struggling to become competitive with low-cost carriers such as Southwest Airlines and JetBlue. Rising costs for the O'Hare project would, in turn, make the airport less attractive to newer airlines looking to expand operations.

The financing plan for the project relies heavily on Chicago going further into debt by selling bonds backed by existing passenger ticket taxes and general airport revenue. The city also would tap into additional funds from ticket taxes after getting federal approval of the O'Hare financing plan.